Saturday, April 18, 2020

After Bursa's Shireen, who's next?

#stayathome, 18 April: On March 8, I asked Will we see PH-style 'execution' of GLC leaders? The photograph I used for the posting is of Abdul Wahid Omar, the first good man from the Barisan Nasional era who had to make away after Pakatan Harapan came into power in May 2018. Almost all GLC bosses were removed or resigned in the months that ensued the 'Malaysia Baharu' euphoria. Many were discredited while some were even accused of mismanagement though nobody was ever charged in court for any crime.

Now, under Perikatan Nasional, the GLC bosses appointed by Pakatan Harapan are being removed one by one. Yesterday, nearly two years after he had to resign as the PNB chairman (and replaced by Zeti Akhtar Aziz, one of Dr Mahahtir's five Eminent Persons, who is still there, by the way), Abdul Wahid was officially appointed as chairman of Bursa Malaysia.

Back in the driver's seat, different vehicle

Reception to Wahid's return has been generally positive, but it's not without controversy. Shireen Ann Zaharah Muhiuddeen, the PH-appointed chairman, had been told to vacate her post over what the Securities Commission Malaysia called "governance issues".

In this case, silence is not golden. Given the potentially defamatory remarks made against her, Shireen has to come out and defend herself, because she runs an asset management company, Corston-Smith Asset Management Sdn Bhd.

While she did resign as a director of the company, in compliance with CMSA requirements, she remained a controlling shareholder. Did she benefit from insider trading? We don’t know.

Also, she was supposed to be on the board of sovereign wealth fund Khazanah Nasional Bhd while holding onto her chairmanship at Bursa. Seemingly it was put on hold. Why?

Shireen has to come out publicly given her reputation for being a corporate governance expert and an activist investor.

People in the know doubt if Shireen would want to prolong the issue. After all the article itself has established at the onset the fact that replacing GLC bosses is normal as there is a new government. Also, a banker told me, she wouldn't want to risk forcing the SC's hand to tell all ...

As I see it, somewhere there lies the difference in the way Muhyiddin and his Minister of Finance have so far dealt with the need to put the right people in the GLCs. They don't go out of their way to cast aspersions on the individuals who had been put there by Dr Mahathir, Daim Zainuddin or Lim Guan Eng.

While it doesn't make the sackings and removals less brutal, they are being carried out more openly and professionally. Outgoing GLC leaders can, at the very least, leave feeling dignified.

1 comment:

PETALING JAYA: Securities Commission (SC) chairman Datuk Syed Zaid Albar, in an email to board members that was sighted by StarBiz, said that towards the end of last year and the first quarter of this year, the SC observed some governance lapses in Bursa.

“This was not unnoticed by the industry which raised many queries on the manner in which Bursa was being managed, in particular, the exercise of executive powers by the non-executive chairman, ” the email said.

The email was sent to explain the reasons behind the removal of Datuk Shireen Ann Zaharah Muhiudeen as Bursa Malaysia chairman.

Syed Zaid said that in the first quarter of this year, he was called by former powers of Putrajaya to explain the SC’s position on the regulatory submission following a letter written by Shireen asking for political intervention.

He said both the SC and MOF (Finance Ministry) then received a letter from Bursa attaching political approval for the appointment of new directors on its board.

“We view such conduct as a serious breach of good corporate governance, ” he explained, adding that involving parties outside the statutory powers of MOF and the SC was pre-emption of their statutory powers.

He said several public interest directors (PIDs) have also voted to file a judicial review (JR) against the SC and MOF’s decision on the regulatory submission.

“As PIDs, they should have first and foremost put public interest and the interest of the capital market first.

“Filing of the JR would have serious repercussions on investor confidence in the capital market, its regulator and the MOF. The failure of the PIDs to give due consideration to these factors render them in our view, no longer fit and proper to be a PID, ” he said.

On March 11, the SC wrote to the board of Bursa expressing its concerns on the role of Shireen, who it felt had over-reached into executive roles.

“This compromises the checks and balance which the non-execs provide to oversee management’s decisions, ” he said.

He explained that on March 17 and April 3, the SC wrote to MOF with regards to the renewal of several Bursa board members.

“In these letters SC also highlighted its concerns to MOF with regards to the lack of fit and properness of two PIDs (including Shireen) and had proposed that she and another PID be replaced, ” he said.

At press time, Shireen has not responded for comment.

The SC last Thursday removed Shireen as non-executive chairman of Bursa Malaysia and Tan Sri Abdul Wahid Omar will assume that position starting May 1.

In a statement on Thursday, the SC said the power to appoint and remove a PID and chairman of BURSA MALAYSIA BHD rests with the Minister of Finance, as provided for in the Capital Markets and Services Act 2007 (CMSA).

In exercising this power, it said, the Minister consults with the SC before arriving at his decision.

“The consultation in this instance revolved around governance issues and the current Bursa chairman’s fit and properness to continue holding the position.

“Following our consultation, we believe the Minister has decided to revoke Datuk Shireen Ann Zaharah Muhiudeen’s appointment, ” the SC said in the statement last Thursday.